Wholesaling A Tenant Occupied Property With A 14 Month Lease

[Michael Askew]

Hey guys! I'm a wholesaler/investor in the Charlotte, NC area and I need advice on a deal that I'm currently working on.  The good news is that after staying in touch with a home owner for 3 years they finally decided to sell their house to me. The unfortunate news is that before he agreed to sell the house to me he put a tenant in place under a long term lease. I'm looking to wholesale this house but the end buyer would have to hold the house for 14 months before they can rehab it. Also, the rental numbers does not look good to an investors eye because it does not meet the 1% rental rule (the current tenant is paying under rent value for about $300). I have buyers in place who would jump all over this deal if the 14 month lease did not exist but nobody seems to want to rent this place for 14 months and then rehab it after the tenant lease expires. Any advice would be highly appreciated. Thanks!

Here are the numbers/info below:

• Property Address Osprey Dr:
  • ARV $250k-$260k
  • Asking $215k
  • Tenant in good standing; lease expires in 14 months; monthly rent $1195 (can increase to $1400 after lease expires)
  • $4,000 earnest deposit
  • Need to close by 3/31/2018 to do a 1031 exchange
  • Refrigerator was purchase new in July 2017; there is an extra A/C unit that was brought from another rental; recently replaced furnace, roof, gas cooktop, oven, disposal, all bath vanity lights, extra insulation blown in attic, and the water heater was changed

Michael Askew II